Celero Communications closed a $140 million funding round to build coherent DSP chips that turn fiber optic cables into faster, greener highways for AI infrastructure. The California startup announced the raise on November 17, 2025, combining a $100 million Series B led by CapitalG (Alphabet's growth fund) with a previously undisclosed $40 million Series A from Sutter Hill Ventures.

Why it matters: AI data centers now burn electricity like small cities. Celero's chips optimize light signals across medium distances—campus to campus. They cut latency and power draw. That means less cooling, lower carbon footprints, and infrastructure that scales without overheating.

The big picture: Traditional data center chips work well inside one building. Telecom chips handle long hauls but cost too much for AI workloads. Celero fills the gap with coherent DSPs—digital signal processors that convert light into electrical signals more efficiently. They work for distances between AI campuses—hundreds of miles, not thousands.

By the numbers:

• Total funding: $140 million
• Series B: $100 million (CapitalG)
• Series A: $40 million (Sutter Hill Ventures)
• Other investors: Valor Equity Partners, Atreides Management, Maverick Silicon

What they're saying: "We want every light pulse to carry more data," co-founder Narman Yousefi told Reuters. James Luo from CapitalG, now joining Celero's board, says the chips make AI infrastructure accessible beyond hyperscalers.

Zoom in: Yousefi and co-founder Oscar Agazzi are veterans of Marvell, Inphi, Broadcom, and ClariPhy—companies that built the backbone of modern networking. Their Irvine, California team is betting coherent optics can do for AI what it did for telecom: move more bits per photon, with less energy per bit.

The intrigue: Energy saved on cooling doesn't just cut costs. It frees capacity for new AI models. Think real-time climate simulations or lag-free generative art tools. Celero's chips let distributed clusters act like one unified system, learning faster across geographies.

What's next: Chip production starts in the coming months. Celero is testing on live optical networks with Google and Meta, both building data center campuses near renewable energy sources. The goal: shift AI from chip-centric to network-centric, where infrastructure accelerates rather than bottlenecks progress.

The bottom line: Cheaper, greener AI infrastructure doesn't just help tech giants. It opens doors for startups, researchers, and everyday tools—from smarter assistants to faster drug discovery. All running on light.